Signs of resistance ?

2. After a sharp up move, prices start moving sideways. Again, the Nifty is moving between 2750 – 2800 for past four days.

3. Price bars show decline in volatility – Narrowest Range in 7 days and / or Inside Day. The Nifty has both, today. This reflects uncertainty in the market. Now we have to ask ourselves, what is the market uncertain about ? The answer should come from price action. If the market feels there should be no dip, it will start another up move above 2825. If it is uncertain about continueing the uptrend, it will drift down below 2750.

4. Momentum Indicators reach extreme levels. This is the least important of all signals, but it does have value when used in conjunction with other patterns. TM Stoch, a modified stochastic used in Trend Mechanic  has reached 100, suggesting an extended market on the upside. We may expect a dip or a period of consolidation.

5. Put Call Ratio. Bikramjeet Singh points out:
“While markets are going up, the PCR is inching down. Usually I have seen the reverse. What does it imply ? Please plot a comparitive chart of NIFTY PCR and NIFTY and give your views.”

Unfortunately, I do not track the PCR or correlate it with the Nifty. Perhaps, readers who do so may like to offer their views. Thanks.